What about 401k contributions through my employer? And health insurance premiums? I'm confused if those count as "above-the-line" deductions or not.

Employer 401k contributions and pre-tax health insurance premiums are already excluded from your W-2 Box 1 wages. They've already reduced your reported income before you even start calculating AGI. That's why they don't appear as separate "above-the-line" deductions on your tax return - they've already been accounted for. This is different from things like traditional IRA contributions which you make separately from your paycheck, so those need to be deducted as a specific adjustment to income.

Thank you SO MUCH to everyone who responded. This makes so much more sense now. So in my original example with $230k gross income and $9,800 in deductions, my AGI would depend on WHICH deductions those are. If those $9,800 were all "above-the-line" deductions like traditional IRA, HSA, etc., then my AGI would be $220,200. But if some of those deductions were itemized deductions like mortgage interest or charitable donations, those wouldn't affect my AGI at all. And the $78k in taxes I paid throughout the year is completely irrelevant to AGI calculation. This clears up my confusion completely!

Is that really correct though? Won't that cause issues when you sell the shares later? I thought there was a specific way you had to report ESPPs to make sure the basis gets tracked correctly.

You're right that it's not ideal. The proper way is definitely through the Stock Options section I mentioned. The "Other Income" approach is really just a last resort if you absolutely cannot find the proper entry point. When you later sell the shares, you'll need to manually calculate and enter the correct adjusted basis. It's much better to use the proper ESPP entry screens which will help track your basis automatically and ensure everything is reported correctly on your tax forms.

You're definitely not alone. I switched from FreeTaxUSA to TaxSlayer last year because of this exact issue. The problem is that most tax software is designed for "typical" W-2 employees without stock compensation. As soon as you have slightly more complex situations, it becomes a treasure hunt.

Seriously? So many people just left money on the table? That's crazy! Is there anything special we need to do when filing super late, like 2+ years late?

Nope, there's nothing special you need to do for filing super late returns. You use the same forms that were applicable for that tax year (which is important - you need to use 2024 forms for 2024 taxes, not current year forms). The only real difference is you typically can't e-file tax returns from more than 3 years ago, so you'd need to mail in physical forms. The amount of unclaimed refunds is shocking, right? Most of it is from people who earned too little to be required to file but would have received refundable credits if they had filed. A lot of college students and part-time workers fall into this category.

The deadline for IRA contributions for a tax year is always the original tax filing deadline (usually April 15 of the following year), regardless of whether you file for an extension or file late. So unfortunately for 2024 taxes, that deadline passed in April 2025. You can still make IRA contributions now, but they'll count toward the 2025 tax year.

Do you know if there's any way to offset or reduce state capital gains taxes? Do strategies like 401k contributions work for state taxes too?

Generally, 401k contributions will reduce your state taxable income as well as federal, so that strategy works for both. In most states, their tax system is linked to the federal system, so deductions that work federally often work at the state level too. Some states have unique quirks though. A few states offer special capital gains exclusions for in-state investments or specific industries. And nine states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming) don't have income tax at all, so capital gains are only taxed federally if you live there.

Tax-loss harvesting can be a great strategy. Basically, you can use investment losses to offset your capital gains dollar-for-dollar. If your losses exceed your gains, you can even use up to $3,000 of those losses to offset ordinary income, with any remaining losses carrying forward to future years. Just be careful about the wash-sale rule - if you sell an investment at a loss and buy the same or a "substantially identical" investment within 30 days before or after the sale, you can't claim the loss for tax purposes.

Do you know if you need to file the state R&D credits at the same time as the federal ones? Or can you do federal first and then state later after you've seen if the federal ones are accepted?

You generally can file them separately with different timelines. Most states don't require that you've been approved for the federal credit before claiming the state credit, though some states do require you to at least have claimed the federal credit. The advantage of filing them together is that your documentation will be fresh and consistent. If you wait too long between filings, you might find discrepancies in your documentation which could raise red flags in an audit. But there's no technical requirement to file simultaneously in most states.

I've successfully claimed R&D credits for software development for 3 years now. The key is documenting the technical uncertainty you faced. Keep all technical specifications, design documents, meeting notes discussing technical challenges, repository commit messages, and testing documentation. The IRS wants to see that you were developing something truly innovative - not just implementing known techniques. Track time specifically spent on experimental development vs. routine coding. For your fintech integration, focus on documenting the technical uncertainties you faced when developing the integration and how you systematically evaluated alternatives.